About the consumer price index

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As the Compensation Manager for a company, you are evaluating the company’s pay raise policies. You have gathered the following data about the consumer price index (CPI) for your metropolitan area: Base Year: 1984 = 100.00 2014 = 138.70 2015 = 141.20 The average clerical wages in your company (that is, the average salary of all the clerical employees working in your firm in that particular metropolitan location) are as follows: 1984 = $18,000 2014 = $25,000 2015= $26,200 a. Many of your employees have complained that the wages have not increased in real terms and they are worse off than they were before. Has real wages increased or decreased? b. What rationale would you advocate to the employees? Based on the CPI trends, if you have to make adjustments to the wages, how much increase (or decrease) would you recommend? c. Based on the salary data given in question above, how much will be the contribution of this company to Social Security (employer contribution only), Medicare, and unemployment insurance? Show your calculations

Reference no: EM13967154

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